Who Killed the Electric Mail Truck?

Mail trucks, which mostly drive short and predictable routes, are perfect candidates for leading the electrification revolution. But the USPS, as an institution, is not.

Moveable explores the future of transportation, infrastructure, energy, and cities.

A year ago, the USPS announced it was buying between 50,000 and 165,000 new delivery trucks over the next decade from Oshkosh Defense, a defense contractor based in Wisconsin, as part of the long-awaited replacement of the current iconic mail trucks. The USPS provided few details about the vehicles, except to highlight key features like air conditioning, automatic emergency braking, and other safety technology, none of which the famous boxy neighborhood delivery vehicles have. The USPS also said the trucks would be a mix of both battery electric and internal combustion engine vehicles, but didn’t specify the ratio. 

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At first, the new vehicles, whether gas or electric, were a hit. They’re rather cute for a truck, with a low front grill and huge windshield, giving it the unmistakable likeness of a duck. And your friendly neighborhood postal worker desperately needs them, since the USPS’s current fleet of trucks is 30 years old on average, far longer than the USPS expected them to run. It costs the USPS $5,000 per vehicle per year in maintenance alone to keep them running. And despite that exorbitant expense, it still can’t stop dozens of them from spontaneously combusting every year

But what began as mostly good-natured celebration over a cute, much-needed truck went downhill fast. It increasingly became clear the massive order was utterly unfit for the modern age. In a legally-mandated environmental review, the USPS revealed the gas version of the truck will get essentially the same miles per gallon with the air conditioning on as the current truck gets, or about 8 mpg, worse than the RAM ProMaster, which the USPS also uses, which gets roughly 14 mpg. It also revealed the truck’s weight was selected to be precisely one pound heavier than the “heavy duty truck” cutoff which frees it from various environmental regulations, including getting better gas mileage. And, most controversially of all, only 10 percent of the trucks will be electric, even though the USPS itself said in the environmental review that 95 percent of its routes are fit for EVs.

These revelations have resulted in widespread criticism from environmental groups, electric vehicle promoters, the Environmental Protection Agency, Democrats broadly, and the Biden administration specifically. Why, they ask, is the USPS buying almost all gas-powered vehicles when mail trucks, which drive short, predictable routes and park in the same place every night, are perfect use cases for electric vehicles? It appears to be an amazingly bad decision for 2022, locking in decades more use of an increasingly antiquated and expensive technology, just as every major automaker and shipper is declaring its intentions to do the exact opposite and phase out gas-powered vehicles.

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The USPS’s responses to this criticism have only yielded more questions. On February 6, the USPS released a lengthy statement defending its decision. The USPS said it would buy more electric vehicles if it could afford them. But, it also said its own calculations found more electric vehicles would be more expensive and not be fiscally responsible (an assertion its critics vehemently reject as based on fundamentally flawed analyses, citing a 2021 Atlas Public Policy study that found the USPS could save as much as $4.3 billion over the lifespan of the vehicles, or almost the total cost of the vehicles themselves, by going electric). And just to cover all its bases, the USPS added it could always convert the new vehicles to electric at a later date, although it provides no estimate for how much such a conversion would cost and why that would be the more fiscally responsible decision than buying more EVs straight away. Despite the criticism, the USPS finalized its environmental review and says it will move ahead with the procurement. 

The USPS declined to make Han Dinh, the director of vehicle engineering who has worked there since 1988, or anyone else at the USPS, available for an interview despite repeated Motherboard requests. The USPS subsequently did not respond to a list of questions sent by Motherboard, including why it was not making anyone available for an interview.

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It is easy to conjure theories of corruption or politically motivated decision making. This is the USPS’s most important purchase in decades, and yet it is quite obviously getting it wrong. The fact that Postmaster General Louis DeJoy has already become a villain on the Left for his close Trump ties only makes such assumptions easier. How, a reasonable person might ask, could an organization make such a bad decision about something so important, except out of malfeasance or malevolence?

What these theories—and much of the commentary about the new delivery trucks in recent weeks—miss is not just the history of the lengthy procurement process itself, but the context of the USPS‘s recent history. That recent history is of an organization that considers innovation a synonym for risk, and risks a prospect that it cannot afford to take. The USPS doesn’t want to be anywhere close to the cutting edge of anything, up to and including leading an electric revolution.

After a 2006 law saddled the USPS with made-up debt to help balance the federal budget, the USPS acts as if it lacks the financial flexibility to make any mistakes, a fear that results in an organization so tepid and conservative it ends up making many of them. And all this is occurring during a time where the vehicle industry is undergoing its biggest change in a century, so anyone not moving forward is being left behind. Throw all these factors together, and you have a recipe for the most ironic of outcomes, where the risk averse organization chooses the riskiest path of all and invests in a dying mode of transportation.

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“The Postal Service made individual decisions that might have been rational,” said Michael Ravnitzky, chief counsel to the chairman of the Postal Regulatory Commission from 2009 to 2015, “but taken as a whole, they don't seem explicable to the public because the public is judging it by today's standards, rather than the standards of when [the postal service] started this, like 10 or 15 or 20 years ago.”

In 2009, Ravnitzky and his boss, Ruth Goldway of the Postal Service Commission, a federal agency tasked with overseeing the postal service, saw an opportunity. The new Obama administration was enacting a massive stimulus to the economy, the auto industry was in shambles, and the postal service’s finances were a mess thanks to a 2006 law that created artificial debt to cover up for the fact the federal government owed the USPS tens of billions of dollars. 

2009 was an unfortunate year to be reckoning with the USPS’s future. The internet had eliminated the need for most business mail, junk mail volumes plummeted due to the recession, but ordering stuff online had not yet emerged as a major percentage of the market, making up less than 4 percent of retail sales (it was 11 percent just before the pandemic and is now about 13 percent). As a result, it was far more common for industry experts and USPS pontificators to advocate letting the post office fail as an antiquated institution representing a bygone era than to save it. Unlike, say, airlines and cars people still used, nobody needed the mail anymore, these pundits argued, except to send Christmas cards to the grandparents.

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But Goldway saw an opening. The Obama administration set a goal of putting a million plug-in hybrid electric cars on the road by 2015 as part of its energy policy (it would fall some 600,000 short). At the time, electric cars were still nascent technology as far as the average person was concerned, barely available for purchase outside of California and with relatively short ranges. But Goldway lived in California and she knew about them. They were simpler to maintain and cheaper to operate than gas-powered vehicles, an ideal match for the postal service. 

Selling only the Roadster, Tesla was a different company in 2009 yet to go mainstream. Credit: Joe Raedle via Getty

Plus, it was a perfect time to replace the USPS fleet. The delivery trucks were just entering the end of their useful lives. And, paired with a contract with a struggling domestic manufacturer, new postal vehicles could provide a boost to two struggling American institutions while accomplishing broader societal goals like lowering emissions and improving air quality in the places people work and live.

In February 2009, Goldway published an op-ed in the New York Times advocating for using a couple billion of the tens of billions of stimulus dollars (the number had not yet been finalized) intended for alternative energy programs to convert the USPS’s 140,000 delivery trucks to electric. Building off that work, in May, Ravnitzky presented a detailed paper on converting the USPS’s fleet to electric, finding it would prove cost-effective for most delivery trucks over the life of the vehicles even at 2009 battery cost and performance levels (it helped that gas prices were quite high at the time). As a result, Ravnitzky concluded, it ought to be “an integral part of the nation’s energy goals.”

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Within a day or two of her op-ed being published, Goldway received a call from the Postmaster General at the time, John Potter. Goldway and Potter have different recollections of that conversation. Goldway recalls Potter expressing interest in the idea. Reached via email, Potter told Motherboard, “I believe that I told her that the USPS had investigated alternative fuel options for its delivery vehicle fleet—electric, hybrid, propane, etc.—and that at that time there were no viable options in the marketplace.”

Despite releasing the Chevy Volt, a plug-in hybrid, later that year, GM and other auto industry executives discouraged the USPS from pursuing EV options. Credit: Bill Pugliano via Getty

Goldway also talked to people in the Obama administration working on clean energy issues, and they initially expressed interest in the idea, she remembers. But the administration couldn’t figure out how to give the USPS the money, because it is technically an independent agency. Should the money go to the General Services Administration, which manages the vehicle fleet of the rest of the federal government (but not the USPS)? Trying to appropriate the money through Congress would be a nightmare. It seemed to Goldway like the administration lost interest. The postal service was never a high priority, so the seemingly minor problem of how to actually get the USPS the money for new trucks proved enough to mothball the idea.

Plus, the major auto manufacturers were telling Potter there was no electric option worth considering. The USPS needed vehicles where the driver is on the right side of the car so they can easily deliver mail to mailboxes. Potter told Motherboard that the major auto companies said the combination of right hand drive and alternative fuel had “no viable solution in the market. “While the USPS had a strong preference for an alternative fuel option, there simply was not a product in the market at the time to meet the Postal Service requirements.”

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This matches what Ravnitzky remembers hearing from the USPS engineering department at the time. He heard “a lot of skepticism and poo-pooing over the idea that you could have electric vehicles deliver mail,” he told Motherboard. “It was just considered this sort of flaky idea,” even though his paper documented several experiments in the past where, with far inferior technology and far shakier engineering, the USPS and other delivery organizations had in fact delivered mail with electric vehicles. In fact, the USPS bragged about such accomplishments in a 2008 pamphlet.

The USPS boasted it had the "nation's largest alternative fuel fleet" in marketing materials while dismissing the idea of using them on a larger scale. Credit: Department of Energy.

Still, these early trials with experimental technology had their issues. Battery replacements were hard to find. Repairs were expensive because few people knew how to fix them. And they were sensitive to temperature changes due to the primitive battery designs. Ravnitzky sensed an unwillingness to revisit EVs, a kind of institutional black mark on the entire concept of using electric drivetrains because of these early travails. 

Plus, the USPS was a different organization then. Some of these experiments predated the USPS itself, which was created in 1971 (it continued to receive federal subsidies for about a decade to ease the transition). Before that, it was the Post Office Department. Back then, the organization was a full-fledged part of the executive branch, a line item on the federal budget, the postmaster general was a member of the Cabinet, and the post office was a department with resources and political connections; in fact, becoming postmaster general was an explicit reward for having political connections. It could afford to buy a few hundred electric Jeeps, for example, just for the fun of it, even if, in the 1970s, they did prove to be expensive to operate. 

DJ-5E Electruck produced by AM General in the 1970s. Credit: NARA

But times had changed. Starting in the 1980s, the USPS had to pay its own bills, received no subsidies from Congress, had no mandate to consider environmental or social issues, and mostly heard from Congresspeople when they were getting complaints about their local post office reducing its hours but were nowhere to be found when it came time to discuss the $56 billion in made-up debt the agency had been saddled with. If politicians weren’t publicly rooting for the USPS to go away as an antiquated institution from a bygone era, they at least weren’t going to stick their necks out for it, because they could no longer see to it that a local political supporter got a job at the post office. For most politicians, the post office had become a non-entity in ways that both helped and hurt the postal service. The USPS was going alone and would have to make do with what it had.

And what it had, in the late 2000s, was some 142,000 decaying delivery trucks, most pushing 20 years old then, with no air conditioning or power steering, that didn’t comply with any environmental regulations because they had been built before such regulations existed, got terrible gas mileage, and needed replacement parts that manufacturers were no longer making. USPS engineers were taking the body from one truck and the parts from another to make a new one, stacking safety hazard upon safety hazard as it created more and more Frankentrucks. 

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The engineering department knew it desperately needed new vehicles but that it wasn’t going to get them any time soon. So it became intimately familiar with the 142,000 of the ones it had. Internal combustion engines were what the engineering people knew. If a part broke, they knew how to get a new one, or how to fashion one together if new ones didn’t exist. The fact that they were able to stretch the useful life of these trucks beyond the planned 20 years and push 30 years or more has been considered by the engineering department as nothing short of heroic. 

For the people who “bleed blue,” as the saying in the USPS goes, electric vehicles may have been better in theory, but gas was better for the realities they faced. Because when Congress inevitably screws them again and makes them stretch the lives of the next trucks a decade or two longer than planned, they’ll need to duct tape and glue those trucks together, too. And they don’t know how to glue an EV back together. 

Almost precisely six years to the day after Goldway’s op-ed published in the Times, the USPS finally met with suppliers to discuss a new delivery truck.

In those six years, the USPS had lost critical time. Its fleet had gone from merely old to decaying. They were catching on fire. Each fire was investigated by an engineering firm, previous Motherboard reporting revealed, which would later conclude there was no one design flaw causing them. Instead, old, vulnerable vehicles were simply failing. The USPS had no hope to stop the fires; it could only hope to limit the damage while it waited for replacements.

On February 28, 2015, the USPS held a conference for potential suppliers of a new delivery truck. At the time of the presentation, the USPS’s delivery fleet ranged in age from 14 to 28 years old, with the majority of the vehicles, if they were humans, old enough to legally drink. The new trucks were to have a 20-year life span, the steering wheel on the right-hand side, a two and four-wheel drive option, traction control, a cargo compartment tall enough for a postal worker to stand in, a driver-side airbag, and a minimum payload of 1,500 pounds. Air conditioning was optional. If all went according to plan, the USPS would receive its new trucks starting in January 2018.

That summer, the USPS released a list of 15 prequalified manufacturers, companies that submitted the necessary information and met federal procurement rules. They would each build prototypes for the USPS to test.

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Andrew Tempest’s company, Emerald Automotive, was one of those suppliers. He was excited about the possibility of building the next USPS truck. He had experience remaking iconic vehicles, as Emerald had done with the plug-in version of the London taxi. Tempest, speaking with Motherboard recently, said he always feels proud when he steps into one of those new taxis, taking photos with elated drivers, and would have loved to feel the same about the new USPS trucks. 

Emerald wasn’t merely a scrappy EV startup. Despite a name that meant nothing to Americans, it had serious muscle behind it. In 2014, it was acquired by the Chinese car giant Geely, which also owns Volvo and Lotus. Emerald had a factory outside of St. Louis where it could manufacture the vehicles domestically. And, to strengthen its appeal to a U.S. institution, Tempest and his co-founder, Rian Urding, decided to partner with AM General, an auto company which has a history tied to the original Jeep and Hummer brands. 

The partnership made sense to Urding, who knew a major American government vehicle contract was unlikely to be awarded to a bunch of Brits owned by a Chinese company using Swedish parts. But AM General, despite its limited technological capabilities, had deep roots with the USPS, a history in American auto manufacturing dating back more than a century, and an obvious eye towards American design. With AM General’s name and design plus Emerald’s engineering and technology, Urding thought, they had a chance.

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Urding and Tempest had a team of 57 people working on 18 prototypes using Volvo parts. Both of them believed they put together strong vehicles that met and exceeded USPS’s specifications. Each bidder had engineers stationed at the test track in Michigan, where the USPS stress-tested the prototypes by speeding them over high curbs and loading them up with heavy, unsecured weight in the cargo area and swerving back and forth (Tempest called the testing “fairly unsophisticated”). Although the USPS never issued updates or reports on other bidders’ vehicles, each team’s engineers could see which were getting towed off the track and how frequently they were in the shop. Tempest said the reports he was getting from his engineers were encouraging; other vehicles needed constant work, but the Emerald/AM General prototypes were holding up. 

Not only were their prototypes sturdy, but they were versatile. They could easily be manufactured with virtually any drivetrain the USPS wanted: two-wheel drive, four-wheel drive, gas, hybrid, or EV. At the end of the testing phase, Tempest said, it was clear their truck and Oshkosh were the frontrunners.

And then Emerald waited. Months went by without any update from the USPS. Geely scheduled a meeting with Emerald in England sometime in late 2017 to figure out what was going on, Tempest recalled. According to the original USPS schedule, the USPS should have decided a year before who won the bid. The winner should have been at the tail end of the manufacturing preparation period, and they should have been just about to deliver the first trucks. Instead, it was silence from the USPS. Geely was getting impatient.

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There were other factors at play, too, Tempest said. For example, this was the height of the Trump presidency, and Geely management was well aware that a deal involving a Chinese company to make trucks for the USPS—a combination of two of Trump’s favorite rhetorical punching bags, the USPS and China—would likely present its own issues. 

But mostly, Tempest said, Geely was upset about the delays. “We spent all this money on these prototypes. We’ve got a team of 57 people here who are continuing to work on this. And every time, you come and tell us it’s gone back another three months,” Tempest recalled Geely saying. 

This three-more-months routine went on for a year. It just seemed, to Tempest and his bosses at Geely, that the USPS couldn’t make a decision. Tempest never figured out why.

Finally, Geely had enough. It was a big company with lots of other projects for Emerald’s engineers to work on. They had better things to do in a rapidly evolving, competitive industry than sitting around waiting for the USPS. They told Tempest and Urding to pull out of the bid. They weren’t alone. Other bidders, like VT Hackney and Mahindra, also gave up. In the end, the new USPS trucks weren't the result of a procurement based on merit. It was a battle of attrition. And Oshkosh ended up winning that battle in February 2021, four years later than scheduled.

While I was on the phone with Tempest, he did some quick math. The USPS is spending $5,000 a year on repairs for its current delivery trucks, of which there are approximately 142,000. That’s $710 million on repairs alone, each year. He estimated his new trucks would have cost about $30,000 each, give or take. Meaning it would have cost the USPS just as much to buy about 24,000 of those trucks every year as it would have to fix the ones it already had. And that’s a conservative estimate, before even factoring in fuel savings and other efficiency benefits from having more modern vehicles that can do the job better and quicker. In other words, in just six years, the USPS could have completely replaced its entire fleet for less than it would have spent keeping its current one running. 

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But the USPS, like many large government bureaucracies, have two different budgets: operating and capital expenses. The operating budget of some $80 billion a year is the one that goes towards delivering mail every day: paying people, fueling trucks, fixing trucks, running their equipment and facilities, and so on. The capital budget, which is just a couple billion dollars a year at most, is the one that pays for investing in upgrades to all that stuff: Buying new trucks, purchasing a new HVAC system for a post office, and the like. 

While any individual USPS employee easily understands that paying $5,000 a year to keep 30-year-old trucks running makes no sense, the USPS bureaucracy can’t. To buy new ones would be a capital cost, for which the USPS would have to borrow money, something it legally could not do for the last decade.

The USPS has had to keep using these 30 year old trucks. Credit: Robert Alexander via Getty

It had reached its Congressionally-mandated borrowing limit. If the USPS had been able to borrow more money, it would have had to give it to the federal government as part of the terms of that disastrous 2006 law, which mandated the USPS pay it $5.5 billion every year. The USPS did so, amassing some $18 billion in an account managed by the federal government, until 2011, when it stopped because it could no longer afford it. So while the USPS could continue to run up deficits in its operating budget, it couldn’t borrow any more money for capital expenses, the kind that saves an organization money in the long run. 

This isn’t just about trucks, either. Many postal facilities could be much more energy-efficient with upgraded or better-maintained HVAC systems, for example, or investing in solar panels, saving the postal service money through reduced energy costs. But the agency believes it cannot afford to do this, as it repeatedly says in its financial disclosures, so it doesn’t, and then pays more for the repairs when needed (or simply doesn’t do them for as long as it can). 

As the USPS dragged its feet for reasons both within and outside of its control, the world around it changed. Had the vehicle order been placed in 2017 as originally planned, it likely would not have met the frosty reaction it did today, at least not for the same reasons. An order of 5,000 EVs in 2017 would have increased the total number of EVs purchased that year in the U.S. by 5 percent. It would also have been the largest EV order by any postal service and predated FedEx, UPS, and Amazon orders in electric delivery trucks. It would have perhaps been praised by the same people now scolding it. And, all too likely, scolded by people now paying it no attention.

In the time the USPS pondered its next vehicle, Tesla went from selling a handful of sports cars to churning out EVs at two large factories, with two more on the way. Credit: Future Publishing via Getty

But, like so many things about the USPS, the world changed around it while it stayed stuck. In 2017, there was an open question, for example, as to whether Tesla would survive as a company. Now, it is one of the most valuable companies in the world. In the last few years, every major automaker has committed billions—in some cases, tens of billions—of dollars to the EV transition. EVs are not the exception but the norm in many European countries, with EVs accounting for 65 percent of sales in Norway, for example, and about one in five cars sold in the UK. Here in the U.S., there are more than one million EVs on the road in California. The costs have completely changed, too. Tempest said that when they were working on the USPS prototypes, a battery to power a small truck to have a 20-mile range for a plug-in hybrid would have cost about $8,500. Now, thanks to the rapid decline in battery prices, it would cost about $1,500. 

Sometimes, the USPS’s risk aversion is one of its greatest strengths, a determination to stay the course, go out on the route, and deliver the mail no matter what, even when its loudest critics are saying it no longer has any reason to exist. That steadfast dedication to routine and the value of its own ways serves it well in times of hardship. But other times, that conservatism costs it dearly, when everything has changed except for the post office.

The culture of the post office is a militaristic one, where “just following orders”-type logic is a common excuse for enforcing nonsensical policies. The Board of Governors hires and fires the Postmaster General, not the president, and the Board of Governors, in Goldways’s words, “can’t be bothered with dealing with the public.” 

Goldway, who had a background in consumer advocacy when she was appointed to the Postal Regulatory Commission, is one of the few people from outside the postal world to become PRC chairperson. She found the Board of Governors, and the USPS in general, to be well insulated from external pressure. This was, after all, the whole point of forming the USPS, removing it from the president’s purview and influence, to depoliticize it and protect it from undue influence so it could make sound business decisions. People at the time argued it would make the USPS more efficient, more businesslike, more flexible, more attuned to customer demands rather than political winds, and a better steward of a vital American institution. If nothing else, the new postal truck will be a constant, ever-present reminder of just how wrong they were.

Tagged:

USPS, Moveable , Louis DeJoy

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